You cannot completely remove the risk of receiving a chargeback or becoming a victim of credit card fraud, but if you follow these credit card best practices, you’ll reduce the risk.
For Keyed-In and Online Payments
- Request the card information, like the name on the card, billing address, card number, expiration date, and CVV code on the back of the credit card.
- Have the customer sign a form authorizing the payment and acknowledging that they understand your return policies. Keep this form on file, particularly if a customer is making a large purchase.
- If you’re shipping products to a customer, keep the tracking information and get a delivery receipt. If you’re sending a large or expensive item, require signature confirmation on delivery.
- Before you process large transactions, verify their company name (if you’re selling to a company) and their billing address.
- Look up suspicious addresses.
- Make sure billing and shipping ZIP codes match. If they don’t match, call the customer and ask them why. If their answer makes sense, accept the payment. If they don’t have a reasonable explanation, don’t accept their payment.
For In-Person Payments
- If the card is physically present, always insert or swipe the card.
- Get a customer signature on every transaction. Doublecheck that the signature matches the signature on the back of the credit card. If the card isn’t signed, ask the customer for a government issued ID and to sign the back of the card. You can’t require that a customer show you their ID and seeing that ID won’t change your liability for the transactions, but an unsigned card is invalid and should not be accepted. So, if a customer with an unsigned card refuses to show you their ID, don’t accept their credit card.
- Provide a receipt.
- If you’re processing multiple payments for the same customer over a period of time (for example, if they’re paying you in installments), get a signature for each payment. Clarify on each receipt what that particular payment is for.
- If a customer is being charged a recurring payment, ask for written permission to charge your customer’s card periodically.
- If you have to provide a refund, always issue it back to the card originally used. If, for some reason, you have to provide the refund through a different method, such as cash or check, get a signed agreement from the customer stating they received the refund.
- Do NOT ask a customer to sign a statement waiving their right to dispute the transaction.
- Include your contact information on the receipt – your phone number, address, website, or even your social media pages.
- Print your refund or cancellation policy directly on your receipts.
- Make sure your name is recognizable.
- Write an accurate description of goods or services sold.
To Protect Yourself from Fraudulent Buyers
- Never wire or send money to a third-party at your customer’s request.
- Never use a third-party shipping service you’re not familiar with.
- If you’re suspicious, ask your customers for additional information, like a government issued ID.
- Don’t split large orders among multiple credit cards.